Bit­coin

of the bulls in the mar­ket. The un­prece­dented flight in value of Bit­coin this year con­tin­ues to con­fuse and con­found mar­ket watch­ers and in­vestors. The price of Bit­coin, a type of cryp­tocur­rency, has zoomed by over 20 times from about $750 at the be­gin­ning of 2017 to around $15,000 last month.

So what is Bit­coin? Bit­coin is the first de­cen­tralised dig­i­tal or virtual cur­rency that largely ex­ists on­line. No gov­ern­ment or tra­di­tional banks print it, and it has no phys­i­cal ap­pear­ance any­where in the world. The sys­tem of works with­out a cen­tral bank or a sin­gle ad­min­is­tra­tor. It is a cryp­tocur­rency, and the trans­ac­tions take place be­tween users di­rectly through the use of cryp­tog­ra­phy, with­out an in­ter­me­di­ary.

Bit­coin was in­vented by an un­known per­son or group of peo­ple

un­der the name Satoshi Nakamoto and was re­leased as open-source soft­ware in 2009. De­spite many at­tempts to find the cre­ator of Bit­coin and a num­ber of claims it is still not known who Satoshi Nakamoto is, or was. It is not clear whether Satoshi Nakamoto, as­sumed to be a pseu­do­nym, was a name used by a group of de­vel­op­ers or by one in­di­vid­ual.

A lim­ited sup­ply and un­lim­ited de­mand are rea­son for the boom in price of Bit­coin. It is be­lieved that most peo­ple are buy­ing the cry­tocur­rency in the be­lief that others will want it even more in the fu­ture. It is be­ing looked at as a fi­nan­cial investment, opine an­a­lysts. At the same time, they cau­tion that a bubble has de­vel­oped in the Bit­coin mar­ket.

The eas­i­est way to get Bit­coin is by us­ing an on­line ex­change and buyBit­coin

ing just like one would at an e-com­merce site. Some of the In­dian ex­changes from where one can buy the Bit­coin are Uno­coin, BuyUCoin, Zeb­pay, Coin­se­cure and Lo­calBit­coins, among others. Once Bit­coins are bought, the buy­ers usu­ally trans­fer them to an off­line wal­let. A desk­top-based wal­let is the best op­tion, though one can also store them us­ing a mo­bile ap­pli­ca­tion.

But buy­ing the cryp­tocur­rency is fraught with risks. The gov­ern­ment and the Re­serve Bank of In­dia do not recog­nise Bit­coin as a le­gal ten­der like pa­per money. Be­sides, there are no guide­lines on Bit­coin trad­ing in In­dia. So, it is wise to stay away from Bit­coin and the ma­nia sur­round­ing it. But if some peo­ple want to take a plunge, then they could so at their own peril.